Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuite has reaffirmed its long term rating of ‘ACUITE BBB-’(read as ACUITE triple B minus) and short term rating of ‘ACUITE A3+’ (read as ACUITE A three plus) for Rs.100.00 Cr. bank loan facilities of Dwaraka Iron Industries Private Limited. The outlook is ‘Stable’.
Rationale for Rating
The rating factors in the group’s healthy scale of operations, marked by an operating income of Rs. 764.25 Cr. in FY2026 (Prov.) as against Rs. 668.18 Cr. in FY2025. The EBITDA and PAT margins stood at 3.04% and 0.90%, respectively, in FY2026 (Prov.). The increase in revenue and profitability reflects volume-driven growth coupled with improved operational efficiencies. Further, the rating also takes into account the moderate financial risk profile of the group as demonstrated by modest net worth, moderate gearing, and debt protection metrics. The liquidity position of the group is also adequate, supported by sufficient net cash accruals against repayment obligations and a moderate current ratio, albeit debt-funded capex plans for the setup of the induction melting furnace division in the near to medium term. However, the above-mentioned strengths are partly offset by the moderately intensive working capital operations marked by GCA days of 126 days as on 31st March 2026 (Prov.), susceptibility of margins due to volatility in raw material prices, and cyclical and highly competitive nature of the steel processing industry.
About the Company
Incorporated in 2020, Hyderabad, Telangana based, Dwaraka Iron Industries Private Limited is engaged in the manufacturing of TMT bars under the brand name of ‘Dwaraka TMT’. The directors of the company are Mr. Miryala Ravindar Reddy and Mrs. Miryala Navya Reddy.
About the Group
Srinivasa Steel Traders
Srinivasa Steel Traders is a proprietorship concern established in 1995, having an outlet in Baghlingamally, Telangana, and is engaged in the trading business of TMT bars and Cement. Mr. Miryala Ravindar Reddy is the proprietor of the firm.
Dwaraka Ispat Private Limited
Incorporated in 2016, Hyderabad, Telangana based, Dwaraka Ispat Private Limited is engaged in the trading of TMT bars through various retail outlets. The directors of the company are Mr. Miryala Ravindar Reddy and Mrs. Miryala Navya Reddy.
Unsupported Rating
Not Applicable
Analytical Approach
Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support
Acuite has consolidated the business and financial risk profile of Dwaraka Iron Industries Private Limited, Dwaraka Ispat Private Limited, and Srinivasa Steel Traders, together referred to as the 'Dwaraka Group'. The consolidation is in the view of common management, strong operational linkages between the entities, and a similar line of business.
Key Rating Drivers
Strengths
Experienced Management and Established track record of operations
The group is entirely managed by Mr. Miryala Ravindar Reddy as managing director and chief promoter of the 'Dwaraka Group', having experience of more than three decades in the same line of industry. The group is engaged in the manufacturing and trading of TMT bars under the brand name ‘Dwaraka' as well as cement. Moreover, the established track record of operations has enabled the group to establish healthy relationships with its suppliers and clientele. Acuite believes that the group will continue to derive benefit from the established track record of operations and management’s strong understanding of market dynamics.
Healthy scale of operations
The operating income of the group stood at Rs. 764.25 Cr. in FY2026 (Prov.) as against Rs. 668.18 Cr. in FY2025, primarily driven by higher TMT sales volumes despite moderation in average realization prices. The group also continues to benefit from its established sales and distribution network, which facilitates broader market reach and supports incremental order inflows. On the profitability level, the EBITDA margin of the group stood at 3.04% in FY2026 (Prov.) as against 2.78% in FY2025. Likewise, the PAT margin stood at 0.90% in FY2026 (Prov.) as against 0.74% in FY2025.
Going forward, the group has debt-funded capital expenditure plans for setting up an induction melting furnace division in the existing manufacturing facility under Dwaraka Iron Industries Private Limited, with an estimated cost of Rs. 50.00 Cr. The funding is expected through a mix of promoter contribution and external borrowings. The capex is expected to be commercialized by Q4 FY2028. Acuite expects the company to sustain its business risk profile over the medium, supported by its established market presence and distribution network coupled with expected improvement in the scale of operations following capacity enhancement.
Moderate Financial Risk Profile
The financial risk profile of the group is moderate, marked by modest net worth, moderate gearing, and debt protection metrics. The tangible net worth of the group stood at Rs.62.93 Cr. as on 31st March 2026 (Prov.) as against Rs.54.76 Cr. as on 31st March 2025 on account of accretion of profits into reserves and infusion of funds by promoters in the form of equity share capital. The gearing ratio stood at 2.24 times as on 31st March 2026 (Prov.) as against 2.23 times as on 31st March 2025, majorly owing to the short-term debt (working capital limits) and unsecured loans infused by the promoters. Further, the coverage indicators are reflected by the interest coverage ratio and debt service coverage ratio, which stood at 1.69 times and 1.47 times, respectively, as on 31st March 2026 (Prov.). The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 3.86 times as on 31st March 2026 (Prov.) as against 3.93 times as on 31st March 2025. Acuite expects the financial risk profile of the group to remain on similar levels, backed by steady accruals, despite proposed debt-funded capex plans in the near to medium term.
Weaknesses
Moderately Intensive working capital operations
The working capital operations of the group remained moderately intensive, marked by GCA days of 126 days as on 31st March 2026 (Prov.) as against 125 days as on 31st March 2025. The inventory days stood at 38 days as on 31st March 2026 (Prov.) and 31st March 2025 as the group maintains adequate inventory as and when required for order execution. Further, the debtor days stood at 86 days as on 31st March 2026 (Prov.) as against 87 days as on 31st March 2025 and the creditor days stood at 43 days as on 31st March 2026 (Prov.) as against 47 days as on 31st March 2025. Acuite expects the working capital operations of the group to remain on similar levels in the near to medium term owing to the nature of operations.
Susceptibility to volatility in raw material prices and cyclicality inherent in the steel industry
The group's performance remains vulnerable to the cyclical and competitive steel processing industry given the close linkage between the demand for steel products and the domestic and global economies coupled with the presence of several organized and unorganized players. The steel industry is sensitive to the shifting business cycles, including changes in the general economy and seasonal changes in the demand and supply conditions in the market. The prices and supply of the key raw materials directly impact the realization of finished goods. Acuite notes that any sharp raw material cost fluctuations impacting the operating margins and cash accruals of the group will remain a key monitorable.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Growth in operating income by more than 20%, supported by healthy order accretion.
Significant improvement in the operating profitability position.
Improvement in capital structure and debt protection metrics.
Potential triggers (individual or collective) for a downward rating action:
Decline in revenue y-o-y and/or operating profitability margins below 1.8%.
Stretch in the working capital operations.
Deterioration in the financial risk profile owing to larger than expected debt-funded capex.
Liquidity Position
Adequate
The liquidity position of the group is adequate as reflected by sufficient net cash accruals of Rs.7.18 Cr. in FY2026 (Prov.) as against debt repayment obligations of Rs.0.42 Cr. during the same period. Additionally, the cash and bank balance of the group stood at Rs.1.37 Cr. in FY2026 (Prov.) as against Rs.0.70 Cr. in FY2025. The promoters are also financially backed to infuse funds as and when required, thus providing an additional cushion to the liquidity. The current ratio stood moderate at 1.26 times in FY2026 (Prov.) against 1.18 times in FY2025. Moreover, the fund based working capital limits stood utilized at 97.64% for the last six months ended April 2026. Acuite expects the group to maintain an adequate liquidity position supported by steady accruals against debt repayment obligations and a moderate current ratio albeit proposed debt-funded capex plans in the near to medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
764.25
668.18
PAT
Rs. Cr.
6.87
4.93
PAT Margin
(%)
0.90
0.74
Total Debt/Tangible Net Worth
Times
2.24
2.23
PBDIT/Interest
Times
1.69
1.68
Status of non-cooperation with previous CRA (if applicable)
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
Sr.No.
Company name
1.
Dwaraka Iron Industries Private Limited
2.
Dwaraka Ispat Private Limited
3.
Srinivasa Steel Traders
Contacts
List of instruments and names of regulators of the instruments
